Analyst picks for 25 September 2012


My pick: Long Australian dollar-dollar

Expertise: Fundamental and technical analysis

Average time frame of trades: A few hours to a few days

A descending trendline from the highs of 9 August and 23 August has kept the Australian dollar-dollar pair supported over the past four days. A base could now be building for the next move higher. Near-term resistance comes in at $1.0410 (a descending trendline from the 9 August and 23 August highs), $1.0480, $1.0550, and $1.0615 (the August high). Support comes in at $1.0365 (last week’s low), $1.0325 and $1.0250.


My pick: Stay short Australian dollar-Canadian dollar

Expertise: Global macro

Average time frame of trades: 1 week to 6 months

I sold Australian dollar-Canadian dollar at Ca$1.0441 on 14 August to gain exposure to relative US and Chinese growth expectations. The former economy is expected to accelerate this year, while the latter slows. I added to the position at Ca$1.0370 on 24 August. Prices are stalling below resistance at Ca$1.0258, after mounting a shallow recovery. I will continue to hold short, expecting the down trend to resume. A stop-loss will be triggered on a close above Ca$1.0283.


My pick: Long euro-sterling and dollar-yen, short sterling-dollar

Expertise: Fundamental and technical analysis

Average time frame of trades: 1 day to 1 week

The long sterling-Canadian dollar and short Australian dollar-dollar setups from last week worked out well for short-term targets, but follow-through was lacking. There aren’t any high-level events or indicators that look like they can charge serious risk trends. A euro-sterling reversal on former channel resistance isn’t risk dependent. I still like a sterling-dollar reversal after a seven week rally below $1.6150, and a dollar-yen wedge breakout above ¥78.50.